Who Cares About the CEO's Private Life? Customers, That's Who

It turns out that the influence of a CEO extends far beyond the decisions they make in the boardroom. A new survey found that the reputation of a CEO has a dramatic effect on the reputation of the company they are leading. That impact is so great that the respondents to this survey attributed nearly half of the overall reputation of a company to that of their CEO.

Overall, that news spells bad news for many corporate leaders. Well-informed consumers are increasingly losing trust in leaders, according to the research. In the United States, 72 percent of consumers have lost trust in leaders in the past few years, while 71 percent of consumers in the United Kingdom also have lost faith in leaders recently.

"Gone are the days when purchases were made solely on product attributes," said Leslie Gaines-Ross, chief reputation strategist at public relations agency Weber Shandwick. "Today's consumer is savvy, well-informed and privy to a plethora of purchase options. Decisions are now increasingly based on additional factors such as the company behind the brand, what the company stands for and even the standing of its senior leaders."

According to the research, two-thirds of people said their opinion of a company was affected by the reputation of that company's CEO. Additionally, 59 percent of the respondents said that a leader's communication influences their opinion of the company. The survey highlights a shifting feeling toward corporations and their leaders, most notably showing that the bottom line is no longer the ultimate measure of a leader's success and the success of a company.

"In an increasingly seamless world, more consumers are exposed and attuned to corporate actions than ever before. CEOs can't assume that what they say and their teams do are going unnoticed by the public," said Micho Spring, Weber Shandwick's global corporate practice chair. "Corporate communications from the top must set the tone and shape the brand."

This was the second installment of research for Weber Shandwick entitled "The Company Behind the Brand: In Reputation We Trust – CEO Spotlight." The research was conducted by KRC Research and the results were based on the responses of 1,375 and 575 executives. The respondents came from the United States, United Kingdom, Brazil and China.